Considerations before signing long-term care agreements

When moving to a continuing-care retirement community or personal-care or skilled-nursing facility, one of the last factors families might consider is the legal effect of documents signed on admission.

This is not surprising. The list of tasks is daunting: scheduling the movers; cleaning out the home; remembering to pack the glasses, medications and hearing aids; filing a change of address; listing the house for sale; and arranging for storage of items that cannot be sold or given away.

When they are asked to sign documents, families may be experiencing overload.

On entering personal care (once referred to as assisted living), and especially skilled nursing, the applicant’s family often is operating under the stress of the moment. Papers for signing may include, among others provisions, laundry policies, pharmacy selection, financial disclosures and statements of residents’ rights.

When told by adult children or by spouses that they only need to complete some forms, I am concerned sometimes about what they may be signing. There are specific questions that the trained eye looks for that are not generally apparent to a person completing the form.

Here are some legal issues to consider before — not after — signing.

• Are you a guarantor, indemnitor, responsible party, power of attorney, or just a family member?

All agreements will say applicants are responsible for payment from their own assets, and rightly so. Only new nursing home admissions to Medicaid-certified facilities where the applicants’ funds are so low that they qualify for Medicaid initially might avoid payment altogether. Even then, the Medicaid application and related documents must be handled properly or the family can be at risk.

• If the resident cannot sign and a power of attorney, spouse or other family member signs an agreement, is the signor also responsible to pay from his or her own assets?

It depends. First, skilled-nursing facilities that take Medicaid, under federal law, cannot demand payment on admission from an adult child or power of attorney from their own funds. If the Medicaid application is unsuccessful, however, this status has been made less clear in the past few years by a Pennsylvania law regarding what is referred to as “filial responsibility” — a claim for support of a parent by an adult child.

• An assisted-living facility, now referred to in Pennsylvania as a personal-care home, because it does not take Medicaid, could ask the person who is signing for a parent to also act as a guarantor or indemnitor. This may mean that an adult child is agreeing to guarantee payment from his own assets if his parent cannot. If that is not the intent, then do not sign as a guarantor or indemnitor.

• A power of attorney is the agent for the resident. The agent is not normally obligated to pay from his own funds but he must act responsibly with the money under his control and pay the bills.

• The term “responsible party” is ambiguous. It should mean only that this person is the contact point and not a guarantor or indemnitor. Considering the stakes, it is best that a person who signs indicate they are doing so as an “agent only” or as a “power of attorney only” unless committing his own assets.

How To Be Protected

• First, seek legal advice in advance if there is any confusion because it is better to resolve financial responsibilities than to dispute them later.

• Second, when a person moving into the facility is competent and able, he might sign the forms himself.

• Third, if you must sign, then state you are doing so as “power of attorney only” or “as agent only.” Avoid the use of “guarantor,” “indemnitor” or “responsible party” unless you, as the signer, are willing to consider paying for the care of your family member or friend.

• Finally, if there is a section indicating that all disputes are to be resolved by arbitration, you might ask that this be removed. Arbitrators can be chosen from the industry, and you may be asked to contribute to the cost for payment for the arbitrator’s expenses.

— For more, listen at 4:30 p.m. Wednesdays to “50+ Planning Ahead” on WCHE 1520 radio with Janet Colliton, Colliton Law Associates, and Phil McFadden, Home Instead Senior Care. Janet Colliton limits her practice, Colliton Law Associates PC, to elder law, Medicaid, life care, special needs, and estate planning and administration with offices at 790 E. Market St., Suite 250, West Chester, PA 19382, 610-436-6674, colliton@collitonlaw.com. She is, with Jeffrey Jones, CSA, co-founder of Life Transition Services LLC, a service for families with long-term care needs.